Obama's Economic Death Cult

The Democrat "stimulus" plan is turning out to be the largest pork laden vote buying scheme in human history as Jamie Dupree lists in gory detail.

It includes every wasteful congressional pet project imaginable and will do nothing more than create more government jobs and reduce the liberty and wealth of individual Americans. That these economic strategies have never worked in the past anywhere in the world doesn't matter to the left since their blind faith in The Church of Secular Government doesn't allow them to learn from history or common sense.

One of the High Priests of this religion is Paul Krugman, who calls himself an economist but is really a cheerleader for any policy that subjugates the economic decisions of individuals voluntary trading with one another for the enlightened micromanaging of a vast economy by the anointed.

Here's his latest moronic take on government vs. freedom:

"Next, write off anyone who asserts that it’s always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.

Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens."

Beyond Krugman's breathtaking arrogance and condescension, his analogy is not only incoherent, but insane. Since when have tax cuts "shut down" the government? And who the hell is suggesting that we eliminate taxes all together as Krugman suggests in his inane analogy?

It's also an apples to oranges comparison. Actually, apples to basketballs. Fees for air traffic control directly benefit those that pay them. Krugman's magical government spending plan is like borrowing against future ticket fees and spending it on shrubs outside the train station. The next step will be to raise the fees to pay for the borrowing. That means less people will travel and airport jobs will be lost in order to employ landscapers.

Oh, and don't forget the cut of 30% or so that the government rakes off the top to administer this largess.

Krugman babbles on:

"The point is that nobody really believes that a dollar of tax cuts is always better than a dollar of public spending. Meanwhile, it’s clear that when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts...because a large fraction of any tax cut will simply be saved."

Yeah that's it Paulie. It's impossible for anyone to honestly believe in anything you don't agree with. We all know that government is far more efficient than the private sector that risks its own money and actually has to compete in the real world. What rock have you been living under?

Krugman also frets that individuals will choose to simply save their own money as if it's a bad thing. Where does this fool think the credit that has virtually stopped comes from? The more deposits and investments banks and corporations have the more they have to invest and lend. But Krugman thinks its more efficient to impose the government middleman who will choose where to invest our money taken by force and given to the politically favored, such as criminal organizations like ACORN. That's efficient?

Heres a video from The Center for Freedom and Prosperity that explains the folly of this nonsense in a way that even intellectuals and Paul Krugman can understand:




"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others." - Ayn Rand

Quick Hits: December 11, 2008

** Confused by the massive bank bailout? Here's some answers from Hank Paulson to all the questions you were afraid to ask. Be more afraid of the answers.

** America's favorite domestic terrorist and reprobate William Ayers, is still trying to repair his image with incoherent rationales. Stop selling it Billy, cuz no one's buying.

** Bailout and buy from American car companies? There's no such thing anymore other than that they're headquartered in Detroit . What about all the foreign cars that are built here by Americans?

** Here's some cute video of peaceful and tolerant Muslim children being trained as suicide bombers.

** Obama is offering Israel a nuclear umbrella that will respond to any nuclear attack by Iran. Does this means that Obama has already thrown in the towel in preventing these psychos from getting nukes in the first place?I'm sure The Israelis will appreciate the support after they're dead.

** Chris Dodd wants new management at the car companies, saying: “If you are going to restructure a company you can’t be asking the people frankly, many who were involved in creating the problems we’re in, to be involved in restructuring.” Indeed. So why don't you resign, Dumbass! Or are you going destroy the auto industry just like you did with the mortgage, banking and real estate industries?

** The Pro-Palestian (The UN, US & European Left etc.) will tell you they're anti Zionist, not Jew Haters. What does that mean? Not much apparently.

Homeowners re-defaulting after getting aid

WASHINGTON (Reuters) - Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments, a top U.S. banking regulator said on Monday.

"The results, I confess, were somewhat surprising, and not in a good way," said John Dugan, head of the U.S. Office of the Comptroller of the Currency, in prepared remarks for a U.S. housing forum.

What's surprising is that this government hack is surprised. These are people who never should have had mortgages in the first place but did because the government put a gun to lenders heads. Re-financing these loans just encourages more of the same irresponsible behavior.

These new loans have a default rate of 36%, which is around nine times the average for all mortgages. So the government has just further injured the economy by strong arming banks to again throw good money after bad.

This is the moral hazard that always dooms government-run economies to failure.

UAW Guilt Trip Ad

Complete with veiled threats and class warfare, the UAW is begging us to use our tax money to save their uncompetitive and unsustainable contracts. They must think they should be excused from the bankruptcy courts by virtue of their sheer numbers, as if everyone Else's job is less important than theirs.

Another part of the UAW's argument is that since we wasted money on a bailout for Wall Street and Fannie and Freddie, then they deserve it as much, if not more.

Let's be clear. Bankruptcy would mean a temporary loss of jobs since the demand for autos wouldn't stop and other companies would quickly pick up the slack and the pieces of the Big Three in a more efficient manner that would benefit everyone.

The only thing these parasite are offering is to take your money and throw it at an obsolete business model that has no chance for survival in a competitive free market.

H/T to Hot Air

Dear Baltimore Sun: Politicians Aren't Business Experts

Why the hell are we allowing the incompetence of the Big Three to be "fixed" by people who are not only more incompetent, but completely unqualified? Oh, and they're doing it with our money. Insanity? You bet it is.

From BMI


Dear Editor:

You opine that Detroit automakers "need to explain in detail to Congress how they intend to eliminate thousands of uneconomical dealerships, swiftly bring their labor costs closer to what Toyota pays its workers in this country, and quickly produce more energy-efficient cars that Americans will want to buy" ("Selling American cars," Dec. 4).

No. These companies deserve investment funds only if they're able to make cars that will sell AND can demonstrate this ability to private investors. Congress is manned by people who specialize in winning popularity contests called "elections." These are not people expert in judging business models, or at pondering the pros and cons of different retail-distribution methods, or equipped to accurately discern the nuances of consumer demands for automobiles, or even – judging from their track record – aware of the most elementary principles of finance and economics.

If, say, you're looking for someone to manage your 401(k), would you entrust that job to Sen. Mikulski or Rep. Hoyer? Of course not, for that's not what they do. So why entrust them and other politicians with the job of investing on a vastly larger scale?

Sincerely,
Donald J. Boudreaux

Don Boudreaux is the Chairman of the Department of Economics at George Mason University and a Business & Media Institute adviser.

Gov't Run Auto Bailout Likely

WASHINGTON (AP) - The government would order a major restructuring of Detroit's struggling Big Three auto companies in exchange for a multibillion-dollar bailout under a plan circulating in Congress

Great. Political hacks will now do for the Auto Industry what they did to housing and mortgages. And the same corrupt perpetrators, Chris Dodd and Barney Frank, will be in charge again. These two should be in federal prison but Democrats think they're doing a fine job.

The bankruptcy courts are where every other failing company gets restructured, but Democrats can't resist the prospect of taking over a major industry with Soviet style central planning. Besides, the Democrats union buddies would see their fat, uncompetitive contracts disappear in a responsible bankruptcy plan, so taxpayers will now be on the hook for something private investors and lenders wont touch with a ten foot pole.

This will also be an opportunity for the Big Government socialists to micromanage industry and force the big three to produce enviro-friendly crap boxes that no one wants. It looks like the Eco-Marxist's Global Warming hoax may finally pay off. Remember the Yugo?

Bailout Monitor: We don't know what we're doing

From The Herald Tribune:

The head of a new congressional panel set up to monitor the gigantic U.S. government bailout says the government still does not seem to have a coherent strategy for easing the financial crisis, despite the billions it has already spent in that effort.

Elizabeth Warren, the chairwoman of the oversight
panel, said in an interview Monday that the government instead seemed to be lurching from one tactic to the next without clarifying how each step fits into an overall plan.

"You can't just say, 'Credit isn't moving through the system,' " she said in her first public comments since being named to the panel. "You have to ask why."

Why indeed. Why does anyone with an ounce of sanity and common sense think that just throwing borrowed and stolen money wiily nilly at the largest and most complex economy in the world is going to have any predictable or desired effect?

And it's not as if we don't have dozens of examples of when this was tried and failed in the past and none where it succeeded.

Arrogant, Ignorant and Dangerous

The most frustrating thing about watching congress strut around telling us they're going to solve a financial crisis they created is the fact that they no nothing about the subject. They repeat politically expedient myths and lies about market economics and the equally ignorant public nods their heads at any simplistic explanation of a complex problem.

Look back at the oil bubble of this past summer. One of the favorite scapegoats was speculators in oil futures. It was said they were driving up prices for profit at the expense of the public although none of these demagogues criticised them when the price plummeted. It was never explained or understood that futures traders were just predicting future supply and demand and that all trades require a buyer and a seller.

John Lott warns us not to trust control of our economic lives and individual decisions to government force run by by people who wouldn't know a balance sheet from a bed sheet:

"Politicians pose as the ultimate experts. They may never have worked in an industry or studied an issue before, but after few months of time on a topic they know everything: the types of cars that should be produced, the science of global warming, and how much doctors should charge for different types of surgery...

Outside of studying law, few in Congress even have backgrounds that are closely related to some of the issues covered by government. Just take the Senate this year, almost half, 45, are attorneys. Only one doctor, four farmers, 13 business people, seven teachers, four professors (all law, and three are listed as just adjuncts), and virtually all the others list their past experience as professional politician. No members of the Senate are scientists or economists. One member of the Senate played professional sports, and another owned a professional sports team...

...Harry Reid says Congress will give the automobile companies another $25 billion when they provide a “viable plan.” But how is Congress going to evaluate what a “viable plan” is better than the shareholders and bankers whose money is at stake? The auto companies presumably have to turn to Congress for money because others don’t think that they are good investments.

Would you want to invest in a company that congressmen tell you is a viable investment, or in companies where shareholders and banks are willing to put their own money?"

Dems Will Make It Worse

There are two types of economists. Those that don't know and those that don't know they don't know. Peter Schiff however, now looks like a genius after he correctly predicted with great certitude, the current economic mess we find ourselves in. What's more amazing is that he not only called what would happen but was dead on as to the why. As a side note, he must be having a lot of fun watching the other so-called experts rudely dismissing him while making now laughable predictions of their own.

Now Schiff is predicting further disaster as Obama promises to crank up the presses in a futile attempt to prop up an economy that needs to fall. (Video Below) Democrats are offering more government solutions from the same government that tripped everything up in the first place.

We will have more government spending on inefficient make work projects that take money from the private sector or borrow more on the country's already maxed out credit. Nancy Pelosi and Harry Reid will pass protectionist policies and block free trade deals that will result in retaliatory tariffs overseas. This will be on top of even more uncompetitive new regulations, labor laws and tax increases.

Buckle up and pucker your sphincters folks. It's going to be a wild ride.

Much thanks to Hot Air

Bush Backs $25 Billion To Auto Co.'s

Let's face it. Other than tax cuts, GW Bush has been terrible on economic issues, especially spending. Now he advocates throwing good money after bad with a $25 Billion loan to the Big Three. That's Our money folks.

AP- The White House on Friday threw its support behind a plan to speed release of $25 billion in existing loans to the Big Three automakers but rejected a Democratic proposal to use money from a financial bailout to help the troubled industry

The private sector wont put their money behind these losers for good reason. Their antiquated union contracts make them structurally uncompetitive. Unless a top to bottom restructuring of US automakers is included as a requirement of these loans then all we're doing is delaying the inevitable.

Government bailouts by definition are fraught with moral hazards which in this case has to do with purely political considerations rather than good business sense. This insanity is about preserving the status-quo of unsustainable union contracts. It's also about fear of paying the price of failure that must go hand in hand with success in a free market economy.

The unions have bought off the Democrats in this regard but Republicans shouldn't go along. Bankruptcy will force these companies to re-organize in a more efficient and competitive manner or have their assets sold to better run companies.

Let the private market decide what to do with these private companies. We will all be better off and the taxpayers wont pay the bill to prop up those that deserve and need to fail.

The End of Prosperity

The history of government meddling in free markets has such a long record of failure that only the wilfully ignorant and die hard socialists can fail to see it. FDR's constant and unpredictable inteference prolonged the Great Depression by several years. Nixon's wage and price controls and Carter's windfall profits taxes were among the many things that turned the 70's into an economic disaster. Arthur Laffer explains:

"When markets are free, asset values are supposed to go up and down, and competition opens up opportunities for profits and losses. Profits and stock appreciation are not rights, but rewards for insight mixed with a willingness to take risk. People who buy homes and the banks who give them mortgages are no different, in principle, than investors in the stock market, commodity speculators or shop owners. Good decisions should be rewarded and bad decisions should be punished. The market does just that with its profits and losses.

No one likes to see people lose their homes when housing prices fall and they can't afford to pay their mortgages; nor does any one of us enjoy watching banks go belly-up for making subprime loans without enough equity. But the taxpayers had nothing to do with either side of the mortgage transaction. If the house's value had appreciated, believe you me the overleveraged homeowner and the overly aggressive bank would never have shared their gain with taxpayers. Housing price declines and their consequences are signals to the market to stop building so many houses, pure and simple.

But here's the rub. Now enter the government and the prospects of a kinder and gentler economy. To alleviate the obvious hardships to both homeowners and banks, the government commits to buy mortgages and inject capital into banks, which on the face of it seems like a very nice thing to do. But unfortunately in this world there is no tooth fairy. And the government doesn't create anything; it just redistributes. Whenever the government bails someone out of trouble, they always put someone into trouble, plus of course a toll for the troll. Every $100 billion in bailout requires at least $130 billion in taxes, where the $30 billion extra is the cost of getting government involved."

Obama's Acorn BIG Player in Mortgage Mess

Stanley Kurtz is single handedly doing the job that the MSM wont. While they are up in Alaska rummaging through the trivialities of Sarah Palin's life, he's in Chicago uncovering real news. In his latest column, Kurtz shows that ACORN's thug tactics played a major role in the biggest financial crisis in generations:

"Up to now, conventional wisdom on the financial meltdown has relegated ACORN and the CRA to bit parts. The real problem, we’ve been told, lay with Fannie Mae and Freddie Mac. In fact, however, ACORN is at the base of the whole mess. ACORN used CRA and Democratic sympathizers to entangle Fannie and Freddie and the entire financial system in a disastrous disregard of the most basic financial standards. And Barack Obama cut his teeth as an organizer and politician backing up ACORN’s economic madness every step of the way."

The Crucial Bailout?

The world was supposed to end last week when the bailout didn't pass. We're still here and the Senate passed a bill yesterday with another $100 billion in tax credits on top of the $700 billion already proposed. Apparently this bailout wasn't so important that it couldn't be passed without a lot of unrelated goodies. The fact is that there's plenty of credit still available. The only catch is that you have to be able to afford it.

Some examples of this bill's pork from the Tax Foundation:

Sec. 104. Energy credit for small wind property.
Sec. 105. Energy credit for geothermal heat pump systems.
Sec. 106. Credit for residential energy efficient property.
Sec. 205. Credit for new qualified plug-in electric drive motor vehicles.
Sec. 211. Transportation fringe benefit to bicycle commuters.
Sec. 308. Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands.
Sec. 309. Extension of economic development credit for American Samoa.
Sec. 325. Extension and modification of duty suspension on wool products; wool research fund; wool duty refunds.
Sec. 502. Provisions related to film and television productions.
Sec. 503. Exemption from excise tax for certain wooden arrows designed for use by children.

And congress wonders why they have a single digit approval rating. They screwed us once by creating the problem and are trying to screw us again with their phony and destructive attempts to "fix" it. Fool me once...

Where We Are and How We Got Here

Reason Magazine has posted one of the better explanations of the credit mess. Well documented and well worth reading.

"Let's be clear: This is a Wall Street crisis, not a national economic crisis.
The overall economy, while a bit weak, is still growing. Some
politicians are comparing
the current environment to the Great Depression. But in 1932, when the federal
government last moved to bail out the banking
sector, economic output had fallen 45 percent and
unemployment was a staggering 24 percent. Today, economic output is actually
up and unemployment is a historically modest 6.1 percent. The overall economy
doesn't even face a liquidity crisis in the current turmoil. Consumer,
commercial/industrial, and real estate loans are all up over last
year. "

Bankruptcy, Not Bailout

It's a given that when you have dug yourself into a hole, you should stop digging. The credit crisis was caused by government meddling in free markets for political purposes. The ensuing debacle now has that same government asking us to trust them to fix it.

Jeffrey A. Miron of Harvard University is calling for allowing the markets to work as they were meant to and getting rid of the perverse government inducements that created these disastrous distortions in the first place:

"This bailout was a terrible idea. Here's why.

The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.

Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared...

The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company."

Bailout Fails. Pelosi Helps Sink It

The bailout failed. Good. Now maybe we can get a bill that gets the government that caused this the hell out of the way.

The ever incompetent Nancy Pelosi probably killed the bill with her stupid and laughably false remarks prior to the vote:

"Opponents said part of the reason for the opposition from Republicans was what they termed a partisan speech by House Speaker Nancy Pelosi, said one GOP source.
"Pelosi's partisan speech has caused our members to go berserk and may cost us any remaining chance to pass the bill," the source said.
Pelosi had said that Congress needed to pass the bill, even though it was an outgrowth of the "failed economic policies" of the last eight years."

Brilliant. This idiot couldn't even corral enough Democrats to pass a bill that didn't need ONE Republican vote to pass as ninety-four members of her party voted against it.

UPDATE: Video added of Pelosi's speech

How the hell does she walk with those big Brass Balls clanging around? It was unbridled capitalism? No, it was regulations that forced lenders to make crappy loans to begin with. It "snuck up on us"? What rock have you been living under?
Hell, I was talking about this potential problem to my students as far back as 2003. Are you saying I have better information than you do? OK. Bad example since it seems no useful information enters Nancy's brick thick head.

Don't Blame Bush for This One

The White House has issued a timeline of its efforts to reign in Fannie Mae and Freddie Mac. They were blocked or ignored until it was too late by a Democrat Party (and some cowardly Republicans) more interested in class warfare and racial politics than doing their job:


2001
April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

2002
May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

2003

January: Freddie Mac announces it has to restate financial results for the previous three years.

February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

2004

February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)
June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

2005: April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

2007

July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)


2008
January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase.

March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

** "Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)

** "[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)

** "Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.